THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

MONITA RAJPAL, CNN ANCHOR: North Korea is a nation in mourning and much of the world is wondering right now what happens next.

I'm Monita Rajpal in London. You're watching CNN's continuing coverage of the death of North Korean leader Kim Jong Il.

North Korea's state-run news agency says the 69-year-old died of a heart attack this weekend. Since coming to power in 1994, Kim increased his country's nuclear might and isolation. His repressive rule also saw massive famines that killed hundreds of thousands of his own people. In a sign of the tensions over his death, South Korea has put its military forces on emergency alert and convened an emergency cabinet meeting, and Pyongyang is urging an increase in its own military capability.

Kim Jong Il apparently died on Saturday, but his death was not reported until Monday morning on state-run TV.

Take a look at how North Koreans the man known as their "Dear Leader" died.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I'm announcing in the most woeful mind that our great leader Kim Jong-il passed away dude to a sudden illness on his way to a field guidance on December 17, 2011.

(END VIDEO CLIP)

RAJPAL: The news anchor visibly emotional saying he died of physical and mental over work.

Take a look at how North Koreans reacted to that report.

(VIDEO CLIP PLAYS)

RAJPAL: We have video giving us a rare glimpse inside the reclusive nation. And you can see the outpouring of emotion over Kim Jong Il's death. The state-run news agency says some people were even writhing in pain.

But whatever you might think of Kim Jong Il, there was no denying that he was an unusual head of state. John Vause reports.

UNIDENTIFIED MALE: The appearance made it a little more difficult to treat him seriously at least at first.

VAUSE: He was the diminutive dictator with the reputation for indulging in fine wine, cognac and foreign prostitutes, who held total power over a failing state, developed nuclear weapons and forced the U.S. to negotiate.

UNIDENTIFIED MALE: That is not necessarily the work of a womanizing booze-swilling individual drunk during the day.

VAUSE: Inside North Korea, it was all about Kim, portrayed by his propaganda machine as a political, military, technological, artistic and cinematic genius, a renaissance man who has flown fighter jets and shot 11 holes in one at his first try at golf.

His public appearances were breathlessly reported on state media. He was hailed as the central brain and the morning star.

He was a crazed ruler who loved to make people dance, a million of them all at once and all in step. He presided over a nation more cult than country. "You chase away fierce storms and gave us faith," they sing.

His official biography says he was born in a log cabin in a sacred Korean mountain under rainbows and stars. Western scholars say it was probably in Siberia in a Soviet camp where his father was training to fight.

He loved movies. James Bond was apparently among his favorites. He reportedly was unhappy with North Korea's portrayal in "Die Another Day." No word on what he thought about teen America.

In the late 1970s, it's believed he personally ordered the kidnapping of a South Korean actress and her director husband and for eight years until they escaped forced them to make propaganda films. Kim did apologize for North Korea's kidnapping of 13 Japanese and allegedly approved the bombing of a Korean airlines flight which killed more than 100 people. The apparent motive was to disrupt the 1988 Olympic Games in Seoul.

But U.S. officials dubbed North Korea the soprano state for its role in organized crime, including the production and distribution of heroin and methamphetamines.

UNIDENTIFIED MALE: His legacy will be that he made some bad choices for his country.

VAUSE: He was a man who every day seemed he had a bad hair day, who starved his people, threatened South Korea with the fourth largest military in the world and built missile that could reach Japan and possibly beyond.

The certainty of his brutality is gone. In its place, the terrifying uncertainty of what comes next.

John Vause, CNN, Beijing.

(END VIDEOTAPE)

RAJPAL: While Beijing is paying its respects to Kim Jong Il as Pyongyang's closest ally. The flag at the North Korean embassy in the Chinese capitol was lowered to half staff. A crowd of people gathered to watch the symbolic move in honor of Kim.

And China's state-run Xinhua news agency reports Beijing expresses deep condolences over the passing of the North Korean leader.

Attention is shifting to North Korea's next leader, Kim Jong Un, state media referring to him as the great successor.

We want to take a closer look now at the heir apparent. Kim Jong Un is the youngest son of Kim Jong Il believed to be around 27 or 28 years old. He is the son of the elder Kim's late third wife.

Now, because of his age and lack of experience, he's said to be a political novice. In 2009, he reportedly took a low-level post at the national defense commission and that's North Korea's highest ruling agency that was led by his father.

Last year, he was promoted to four star general, seen as a stepping stone to taking over from his father. And he shares a physical resemblance to his father. And like his father, he may also have diabetes. It's believed that as a boy, he secretly attended boarding school in Switzerland and then Kim Il Su military academy named for his grandfather in Pyongyang.

And he reportedly is a big fan of basketball and Michael Jordan. Our coverage on the death of North Korean leader Kim Jong Il continues in just a moment. Stay with us right here on CNN.

(COMMERCIAL BREAK)

RAJPAL: Welcome back to CNN's continuing coverage of the death of Kim Jong Il.

Reaction has been pouring in from around the world. South Korea's defense ministry has raised its national alert to the second of three levels. And President Lee Myung-bak asked the people of South Korea, quote, "concentrate on economic activities and remain calm."

Meanwhile, Japan also called an emergency national security meeting upon learning of Kim's death. A statement has since been issued offering condolences. And Japan's chief government spokesman says, "We wish the sudden news would not affect North Korea negatively."

China has also offered its deep condolences. North Korea and China are close allies.

And just late word now, wire reports are now quoting the Russian president sending his condolences on Kim Jong Il's death.

Well, from the other side of the world, a U.S. official says North Korea now faces extraordinary change and uncertainty and that an insecure North Korea could well be even more dangerous.

Earlier, the White House press secretary issued a statement saying, "The president has been notified and we are in close touch with our allies in South Korea and Japan. We remain committed to stability on the Korean peninsula and to the freedom and security of our allies."

From Britain, U.K. Foreign Secretary William Hague says Kim's death "could be a turning point for North Korea" and urged the new leadership to "recognize that engagement with the international community offers the best prospect of improving lives of the North Korean people".

China is North Korea's closest ally and Kim Jong Il's death is big news there.

STAN GRANT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, just one statement. They took some questions at the Ministry of Foreign Affairs briefing today, Monita. Those questions been taken to be answered at a later date. The statement basically says, yes, they offered their condolence to North Korea, praising Kim Jong Il as a great leader of socialism, calling on the North Korean people to see this as an opportunity for unity and then repeating a line that we've heard from the United States, that China is committed to stability on the Korean peninsula.

And that is going to be crucial. This relationship between the United States and China really comes under the microscope now. Will they just take up Cold War positions? Will you see the United States firmly in South Korea's corner and China in North Korea's? Will they be able to find a way to work through this?

That puts China very much in the frame. China, of course, brought together the various parties for the six-party talks. They organized these six-party talks. Not all of those countries would ordinarily sit down with each other. Russia, Japan, North Korea, South Korea, the United States and China, all having various competing and contending relationships.

But China was able to bring those people to the table to try to advance their whole debate about China -- that North Korea's nuclear program. Well, now, China is going to have to use all its influence to try to ensure stability with this leadership transition.

Kim Jong Un is not unknown to China. He's being brought here by his father in the past to get the tick of approval really from the leadership. Obviously, with Kim Jong Il being in poor health, the situation that North Korea was anticipating with the announcement of Kim Jong Un succession. But also China anticipating, running various contingencies just for this event.

The real question here is the potential for misunderstanding. We know when there's a heightened situation of alert, that the wrong thing said at the wrong time, the wrong action can lead very quickly to escalation -- and all parties are concerned to ensure that that doesn't happen with so much uncertainty and potential in stability -- Monita.

RAJPAL: Stan, what kind of opportunity does this present for Beijing?

GRANT: It's a crucial opportunity for Beijing. China's stated ambition is to become the preponderant power in Asia. We've seen China extending its reach, its relationship throughout the region, its trade relationships in particular throughout the region.

But it wants to do that peacefully. China does not want to see itself dragged into a conflict that could interrupt its own growth and forestall those ambitions. At the same time, though, the United States has been very clear in recent months with the end of activity in Iraq, the drawdown of troops in Afghanistan, it's going to recommit to this region.

Barack Obama on a recent trip through the region was talking about the U.S. commitment, even going as far as to organize for more U.S. troops to be placed on the ground in Australia. Some have interpreted that as an attempt to try to contain China's rise.

Right now, all of that is in the mix. Just how much influence does China have? How closely can the U.S. and China work together? How mature is the Chinese leadership? How much influence and pressure it can bring to bear on North Korea?

There are so many uncertainties, potential instability here. But you're right, this presents a real opportunity for China -- an opportunity to show its leadership, but also the great potential for things to go awry as well. They're going to be well aware of that -- Monita.

What does Beijing really know about this young man? Do they hold him in much esteem? Do they believe he's credible? Do they even believe he has what it takes to lead this country into the next generation?

GRANT: We haven't heard anything, of course, publicly. But, of course, with his trips to Beijing, the fact that he was brought here by his father and met with the leadership here would give some indication of Beijing's imprimatur.

At the same time, we don't know much about Kim Jong Un. That is the problem. How old is he? Some say 27, 28, 29. Reports of him having attended school in Switzerland, a private school there, being exposed to the West, an interest in basketball, western movies, that he speaks several languages.

But this is still a very young man -- a man that many are questioning now whether he even has the authority to be able to impose himself on North Korea.

But let's not forget, these are the same questions posed about his father when Kim Jong Il succeeded Kim Il Sung. And remember also that Kim Jong Il was never president of North Korea. Kim Il Sung is president for eternity.

So, the questions were asked that Kim Jong Il, whether he would indeed have the authority, those same questions being asked about Kim Jong Un now.

The crucial difference, Kim Jong Il did a long apprenticeship, 20 years by his father's side. His son only a matter of a few years. And he's inheriting a country that is poor, that we know is cut off from the rest of the world where there's a hard-line old leadership, military leadership in place. And how he's able to impose himself on that is going to be the real test as well as what sort of country he wants to lead -- Monita.

RAJPAL: Stan, talk to us a little bit about the relationship between Pyongyang and Beijing and how they became these close allies? Was it a case of keeping your friends close and your enemies closer? Or was there some sense of genuine I guess commonality between them?

GRANT: An ideological unity certainly, if you go back six decades. That was at the core of this relationship. Also, it was forged on the battlefield during the Korean War. China sent tens of thousands of so-called volunteers, members of the military in plainclothes across the border to fight with North Korea, that helped North Korea stave off the U.N. forces, the United States and South Korea and others. So, it was crucial -- a relationship that was crucially forged in the heat of battle.

In the years since then, particularly after the collapse of other communist regimes around the world, notably Russia, that really affected North Korea. North Korea had a sizable economic relationship with Russia.

During the 1990s, it saw North Korea's economy contract some 50 percent. It was heavily in debt. At that point, North Korea was heavily invested in its military. There was that terrible famine that some say claimed millions of lives.

Those years, again, forged that relationship with China is the key economic benefactor as well. China has a big stake in this -- Monita.

RAJPAL: All right. Stan Grant in Beijing, thank you so much.

Well, former CNN chief international correspondent Christian Amanpour travelled to North Korea in 2008. She shares now her memories with us earlier.

(BEGIN VIDEO CLIP)

CHRISTIANE AMANPOUR, FORMER CNN CHIEF INTERNATIONAL CORRESPONDENT (voice-over): We were there with a team in 2008. First, with the nukes, it was around the time when there were negotiations going on between North Korea and the United States. They came to fruition in June of 2008 when, you're right, we saw the nuclear tower, the water cooling tower at the Yongbyon plant blown up.

But it was a moment of hope then which rapidly came to an end in the summer of 2008 because apparently at about that time, most people suspect that Kim Jong Il suffered a stroke. As his health deteriorated, negotiations fell apart, and basically there have been none since then except for there are reports that over the last several months, the North Koreans and the United States have been talking. There were reports of potentially a food deal could be announced, a nutrition deal between United States and North Korea this week potentially.

And there were reports, not completely confirmed, but that there might be some deal, some movement on a nuclear deal with North Korea again agreeing to suspend their enrichment activities. But again, this has not yet been announced. But that was something that certainly United States negotiators who met several times with North Korean negotiators over the past several months both in Geneva and Beijing had hoped to be able to bring to fruition.

VAUSE: Christian, everyone is now looking to the heir apparent, Kim Jung Un, a man who we know very little about. We think he's in his late 20s. He likes basketball.

We heard Mike Chinoy giving us a few more details, that he is a quiet, polite man.

But is this the young man with very little experience, the man who can essentially create the cult of personality as his father and his grandfather did?

AMANPOUR: Well, it's probably unlikely that he will be able to do that. Even Kim Jong Il was not able to maintain the cult of personality that his own father did, Kim Il Sung.

And certainly when Kim Jong Il nominated his young son to take over, people were very concerned. He's very young, hasn't got that much experience that we know of, and he's going to be taking over, we presume, a nuclear nation.

We will have to wait and see. The issue here is whether it will promote more hard line policies from some of the old guard, whether they will sort of, you know, circle the wagons around this young man, and whether it will put a stop to some of these negotiations that were going on with the United States, or whether they will be able to go through nonetheless.

(END VIDEO CLIP)

RAJPAL: Christiane Amanpour there speaking with CNN's John Vause.

Well, CNN's coverage of the death of Kim Jong Il continues after the break. We'll take a look at the effect on business and the stock markets in the region.

(COMMERCIAL BREAK)

RAJPAL: North Koreans there reacting to the news that the man known as their "Dear Leader" is dead. State media say Kim Jong Il died on Saturday of a heart attacks. But his death wasn't announced until just a few hours ago.

Well, after Kim Jong Il's death, South Korea says peace and stability on the Korean peninsula is more important than anything else. A funeral for the long-time North Korean leader reportedly is planned for December 28th following a week of mourning.

Revered at home, Kim Jong Il taunted South Korea and the West with his country's nuclear weapons program. His regime also witnessed mass famines that killed many of his own people.

Well, CNN's Pauline Chiou has been looking into the state of the North Korean economy. She joins us now from Hong Kong.

Pauline, to talk about the state of the economy, there really isn't much of one.

PAULINE CHIOU, CNN INTERNATIONAL CORRESPONDENT: There isn't much of one, Monita, because their economy is very, very fragile. Now, the hermit kingdom is very isolated and lags behind other countries. Its 2009 GDP was estimated to be $28 billion.

Now, in comparison, South Korea's GDP is more than 30 times that size. North Korea relies heavily on food aid mainly from China since it cannot afford to feed most of its population.

North Korea also depends on China, which is its closest ally, for most of its trade. The Korean trade investment promotion agency which is based in Seoul says China accounted for 83 percent of North Korea's $4.2 billion worth of international commerce in the year 2010.

Now, while North Korea isolates itself, the regime has partnered with South Korea in a complex called Kaesong which is on North Korean territory just north of the DMZ. This complex combines South Korean investment and technology with cheap North Korean labor, 123 South Korean companies work out of the complex.

They mainly manufacture things like clothes, electronics and utensils, 707 South Koreans work at the Kaesong complex. They did leave work early today after the news came out.

South Korea says the North has assured that the facility will remain open and operating normally tomorrow.

Now, as for everyday life in North Korea, I was very curious about this. I spoke with the director of "Daily N.K.," a newspaper in Seoul that covers North Korea. He gave us a good snapshot of what life is like. He said the monthly wage of a family in North Korea is between $3 to $20 per month.

And there's also something called the informal market where mostly women sell products like appliances, clothes, electronics from China, South Korea and Japan. And it's these women who bring in most of the money to an average household because 80 percent of workers in government-run factories and facilities actually don't even get paid.

So, Monita, it's very clear it's a difficult life there in North Korea and it's still very much an economy that has a long way to go.

RAJPAL: We also talked about the isolation. You mentioned there, Pauline, of North Korea. Interestingly enough, Westerners have been doing business there.

Tell us about their experiences.

CHIOU: Yes. That's very interesting. It's mostly Europeans and Chinese business people who are doing business there, not Americans, because of U.S. sanctions there.

But last year, I spoke with a German entrepreneur who set up an I.T outsourcing company there in Pyongyang about three years ago. I asked him, why did you decide to go to Pyongyang? He said because labor is cheap there. Labor in North Korea is cheaper than labor in China.

He also said it was fairly easy to find North Korean workers who are skilled in high tech because many of them had worked in Chinese factories. Also, many of them actually spoke English, so it was easy to train them he said.

He said that he believed there were about 100 Westerners in Pyongyang that do business there. For example, there's a British company that makes DVD players there and also a French company that makes cement.

So, it's a pretty interesting look at what's going on behind the scenes there in Pyongyang and some of the Western businesses there. They're trying to actually help the economy there -- Monita.

RAJPAL: All right. Pauline, thank you. Pauline Chiou in Hong Kong.

And we'll be right back. Stay with us.

(COMMERCIAL BREAK)

RAJPAL: Our main story, the death of North Korean leader, Kim Jong Il. State media reported Kim's death at noon local time today, two days, after they say he suffered a heart attack and passed away. The news prompted an outpouring of grief in North Korea which began with the announcement of his death on state TV.

(BEGIN VIDEO CLIP)

(SPEAKING IN FOREIGN LANGUAGE)

(END VIDEO CLIP)

RAJPAL: The question many are asking now is what's in store for a nation known as the Hermit Kingdom. Joining us is John Delury, assistant professor at the -- John Delury, Yonsei University graduate school of international studies in Seoul. Sir, thank you very much for being with us.

We've understood or many have been reporting that the regime's ability to survive this amount of time has been its ability to control any information from outside of North Korea into the country. With now the death of Kim Jong Il, do you believe that that ability still stands?

JOHN DELURY, ASST. PROFESSOR, YONSEL UNIVERSITY: Well, I would actually argue that it's a little overstated just how isolated North Korea is. Some people say from an American perspective that we're more isolated from them than they are from us, and there's been reports of a lot of information coming over the China border including DVDs and cell phones. Of course, North Korea has its own cell phone service, and there are Chinese cell phones on the border.

So, to some extent, Hermit Kingdom, I think, is, you know, a 19th century term that's a little outdated. So, you know, that said, of course, North Korea is not integrated into East Asia and sort of stands apart, and that's going to be the main inheritance that the new leadership has to deal with.

RAJPAL: Let's talk about the new leadership. What do you know about Kim Jong Un, the heir apparent now? We understand that he's in his late 20s, but he isn't one that is known to have much political experience.

DELURY: Well, that's true. He's very young. He's in his mid late 20s. And we knew almost nothing about him until a few years ago when, of course, Kim Jong Il suffered a stroke in the summer of 2008. Since then, we've been getting to see a fair bit of Kim Jong Un. He's been appearing publicly with his father all across the country, you know, being groomed and being brought out to the public.

Last year, I was in North Korea in September, and just days after I left was the main sort of public coronation, if you want, of Kim Jong Un when he was promoted to top leadership position. So, it's still very -- we have very little personal information about him, fragments of having studied in Switzerland as a young boy and little pieces like that.

But over the last few years, he's clearly been unveiled as the appointed successor. And so far, we're seeing that plan being implemented in the media wake of Kim Jong Il's death.

RAJPAL: In the time of transition right now, there are those who are saying that the real power brokers in Pyongyang will be his uncle and aunt. They would be Kim Jong Il's sister and brother-in-law. That said, how much power do they actually have overall and how much of an influence will they have in terms of what happens next for the country?

DELURY: Well, they were promoted along with Kim Jong Un last year in these major promotions. And uncle, in particularly, Chang Sung-Taek has been a prominent figure in foreign relations and economic decisions in North Korea for a long time. So, they're senior political figures. They're experienced, and what is important is they were promoted right alongside Kim Jong Un.

And that was a signal of, you know, the unity within the Kim family that they're doing this together. And so far, the -- of course, this is the image they want to project, but so far, the image we're getting is of, you know, no sign of fragmentation in the North Korean elite. There's consensus behind this succession program.

Kim Jong Un, though, you know, he's the lead face at this point of the new leadership, but obviously, he has to work through consensus and through a coalition of figures like his uncle and aunt and many other figures in the civilian and military ruling elite.

RAJPAL: Much has been said about the domestic propaganda within North Korea, a lot of what people are saying, what has been brainwashed amongst the North Korean people. You were there. What do you believe -- do you think the North Koreans actually buy what they've been sold?

DELURY: Well, I should emphasize I've made a few trips over the last few years, but still, it's limited interaction that you have on these visits, and it's mostly with North Korean officials. Sp, my sample size is small. But, you know, the main impact that most people receive of actually visiting the country is you start to break down the politics and ideology and realize these are normal people.

They're individuals you can get to know with individual characteristics. They have a whole range of opinions. Now, they're not going to openly criticize their system. That's true. But if North Koreans visit the United States, you know, they may not hear that either, and you know, I travel frequently to China, and you don't hear often that kind of criticism, certainly, not with Chinese officials.

So, in a certain sense, they're, I think, more normal than we expect given how little exposure the rest of the world has to life in North Korea and actual North Koreans. RAJPAL: Would you classify this as being a turning point for North Korea?

DELURY: Yes, absolutely. I mean, in its over 60-year history as a country, this is only the second time its had a transition of political power at the top level. So, -- and there were major changes in 1994 after the death of Kim Il Sung, and I think, probably, most Koreans are expecting that this is a new chapter for them, and they're waiting to see what it's going to involve.

And this new leadership is under a lot of test right now as they take their first steps in running the country. This doesn't happen often in North Korea. So, it's a very sensitive period of time.

RAJPAL: Let's take a little bit look back as well. What do you believe was one of the biggest misconceptions of Kim Jong Il?

DELURY: Well, I think, you know, if you look at the immediate period after Kim Il Sung's death when Kim Jong Il came into power, you know, he was seen as a real lightweight, you know, as a kind of playboy, cognac drinking figure, and he turned out to be, you know, a serious political figure.

It's been a very bad time for his country economically, but if you go back and you look at the accounts by western diplomats or so- called sort of enlightened Chinese diplomats, (INAUDIBLE), you know, the economic reformer in China, if you actually read what they say about Kim Jong Il, there's almost a universal description of a very well-informed, rationale, somewhat open-minded, you know, willing to listen political leader.

And I think, you know, the image the kind of buffoon stereotype of Kim Jong Il really distracted people from the fact that he was a leader with some measure of flexibility and realism who could have actually been dealt with much more than he was, particularly, in the last few years.

RAJPAL: All right. John Delury, assistant professor at the Yonsei University graduate school of international studies in Seoul. Sir, thank you very much.

One of Kim Jong Il's lasting legacies will be the country's nuclear development. In 1994, the year Kim came to power, North Korea agreed to freeze and dismantle its nuclear weapons program. Four years later, the U.S. and North Korea held the first round of high- level talks about Pyongyang's suspected construction of an underground nuclear facility.

Negotiations with North Korea became a back-and-forth of broken promises with Pyongyang pledging to stop its weapons program in exchange for aid only to later renege. In January 2003, North Korea withdrew from the nuclear nonproliferation treaty. Well, that April, Pyongyang declared it had nuclear weapons.

Three years later, North Korea claimed it successfully tested a nuclear weapon, but in 2007, Pyongyang agreed to disable its nuclear weapons facilities. The next year, North Korea destroyed a water cooling tower at Yongbyon, the facility where it extracted plutonium for weapons, but progress broke down after that. And in May 2009, North Korea conducted its second nuclear test.

You're watching CNN. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

(END VIDEO CLIP)

RAJPAL: As North Koreans mourn the death of the man known as the dear leader, there has been reaction coming in from around the world over the death of Kim Jong Il. France is saying it hopes North Korea will find freedom after Kim Jong Il's death, and Germany says his death is a chance for change in North Korea.

Well, South Korea has put its military on alert. Relations between the rival nations hit a low point Last Year. Seoul accused Pyongyang of shelling a South Korean island. Wolf Blitzer traveled to North Korea during that tense time.

(BEGIN VIDEOTAPE)

WOLF BLITZER, CNN CORRESPONDENT (voice-over): We had North Korean officials with us all the time, and I mean, all the time.

UNIDENTIFIED MALE: Thank you, Wolf.

BLITZER: They spoke English well and were very intelligent, polite, and even nice. I never felt threatened. Let's not forget this is a communist totalitarian regime. We were restricted where we can go. They want to showcase the best and keep us away from the worst. We constantly pressed for more access, and they sometimes relented.

We saw a lot of the North Korean capital, but we did manage to get into the countryside to see a huge apple and fruit tree orchard where thousands of farmers work what the orchard director said were some 2.2 million trees. That number seemed exaggerated, but whatever it was, it was impressive.

(on-camera): We left Pyongyang probably about half an hour ago. We drove to the countryside, and we're here overlooking all of these fruit trees like row after row after row after row. Obviously, it's snowy out there and you can't see any fruit.

But, eventually, I guess, once the time is right, you'll see a lot of apples and other fruit growing right behind me. We're overlooking the ridge looking overall of this area. There is literally acre after acre after acre.

(voice-over): Once you get outside Pyongyang, you see very few cars on the roads. There were no lights in the tunnels on the roads outside the North Korean capital. People are walking along the sides of the roads. Some are riding bikes. It's eerie being in the only car on the road. This is a very poor country.

Even as we feared there could be a war, we were taken to a silk thread factory where 2,000 women worked diligently. They also took us sightseeing. We saw their Arc de Triomphe, supposedly bigger than the one in Paris. We also went to another source of North Korean pride.

(on-camera): We're on top of the world's tallest stone tower here overlooking Pyongyang. It really is majestic to see what's going on. You see the river. You see the bitter cold, freezing snow. But the buildings are really impressive to see what's going on here in the North Korean capital. And they built this tower to really highlight what they've accomplished over the years.

It's very impressive, I must say, to be on top and someone who lives in Washington, D.C., they make the point of pointing out this is taller than the Washington Monument. And they constantly point out it's the tallest in the world.

(voice-over): Huge pictures of the late great leader, Kim Ill Sung, and his son, the dear leader, Kim Jong Il, were all over the place. I didn't see pictures of the next generations expected leader, Kim Jong Un. At stores, I saw lots of book slamming the United States including "The U.S. Imperialists Started the Korean War.

Later, when it looked like the North Koreans would retaliate for South Korea's live fire military exercise, I thought of all the young people I had seen in North Korea. They seemed so vulnerable. And I worried about their fate if there were a war. I'm not embarrassed to say I got sentimental and emotional worrying about them and their counterparts in South Korea.

(on-camera): It's a serene, quiet morning here along the banks of the Patong (ph) River right in the heart of Pyongyang. Some kids are playing, some couples are walking by. Families are having a good time, but it's sort of misleading, becayse it's anything but quiet on the Korean peninsula right now. It's a very tense moment.

Inside that building up there, Richardson is meeting with North Korean military officers. This may be the most important meeting he's had since arriving here in the North Korean capital. We're watching it every step of the way. The stakes, clearly, are enormous.

(voice-over): Outsiders have been predicting its demise for 60 years, but I didn't get the impression this country was on the verge of crumbling. By the way, 2012 is going to be a huge year for North Korea. That's the 100th anniversary of the birth of Kim Il Sung. They're preparing major events. Since they invited me back, I might go back then, maybe even sooner, though, I hope it won't be to cover a war.

Wolf Blitzer, CNN, Pyongyang, North Korea.

(END VIDEOTAPE)

RAJPAL: Some analysts say those celebrations for 2012 may now be canceled as the nation mourns Kim Jong Il's passing. CNN coverage of the death of Kim Jong Il continues after a short break. We'll hear more about Kim's reign from a man who visited North Korea many times. We'll be right back.

(COMMERCIAL BREAK)

RAJPAL: North Korea is mourning the death of the man they know as the dear leader, King Jong Il. State media say the 69-year-old Kim passed away suddenly on Saturday. A north Korean broadcaster was clearly upset when she made this announcement earlier today.

(BEGIN VIDEO CLIP)

(SPEAKING FOREIGN LANGUAGE)

(SOBBING)

RAJPAL (voice-over): -- overwork after dedicating his life to the people. Some of those people are now openly weeping in the streets.

(BEGIN VIDEO CLIP)

(END VIDEO CLIP)

RAJPAL: We want to show you now a live look at North Korean broadcaster, KCNA, it's been airing tributes to the late Kim Jong Il. Sometimes, his portrait is shown for minutes at a time. We want to give you a look back now at some of the relationships between North Korea and its closest neighbor, nearest neighbor, I should say, which is South Korea.

The Korean Peninsula has long been a hot bed of tension and conflict. The Korean War started in 1950 when the north attacked the south. U.N. troops help defend the south while Chinese troops backed the north. The South Korean capital, Seoul, changed hands three times in three years and almost three million people lost their lives, but the two nations remain technically at war.

They have agreed a truce but not a treaty. And the demilitarized zone along the boarder remains one of the most heavily guarded in the world. We want to get some insight now of what Kim's death means for Pyongyang from someone who's been there.

CNN senior field producer, Tim Schwarz, joins us now from Hong Kong. Tim, describe for us your experience of having been there, and what I guess is your strongest memories.

TIM SCHWARZ, CNN SENIOR FIELD PRODUCER: Well, North Korea is a very different country from anything that non-North Koreans are used to. You could compare it to China in the 1960s or 1970s, Russia in the 1950s, but it's even more than that. It's a country that is completely regimented, completely controlled. The authority goes straight to the top to one man at the top.

And that one man was for the last -- since 1994, Kim Jong Il, who's just passed on. So, people have a huge amount of their national faith and their national belief invested in this one person.

RAJPAL: There's also a sense -- I understand that not much information can come out of this. It's very difficult to actually talk to North Koreans when you're there to get a true sense of what they really think. One of the ideas we understand is that a lot of information is closely guarded, outside information is closely monitored.

But that said, what do North Koreans believe of the outside world or even, I should say, of their brothers in South Korea.

SCHWARZ: Well, one of the aims of the North Korean state is to protect its citizens from the influences of the outside world. So, they try and restrict any information going to them. They want to keep a monopoly of all the information coming into North Korea. That used to work to a large extent in the past, but in recent years, it's just impossible. It's not that North Koreans have easy access to outside information.

But now a days, it's very common for North Koreans to be able to buy smuggled DVDs from South Korea where they can see the standard of living and life in South Korea and how much better of and how much more prosperous it is for them. Many North Koreans have escaped across the boarder, engaged in trade in China and then come back. For them, China is a paradise compared to their own country.

It's no longer possible to continue the fiction among North Koreans that North Korea is paradise on earth, especially since people have experience of the hardships and famine. So, North Koreans no longer believe that they're living in the most wonderful, well-off, perfect society in the world, but it's a long way from having that knowledge to actually doing anything about it.

RAJPAL: I'm also curious to know, Tim, what it was like to -- I guess, your experiences as a journalist in North Korea. I mean, talk to us a little bit about the roadblocks that they put in front of you, if any at all, or any restrictions that you had.

SCHWARZ: Well, of course, there are huge restrictions on being a journalist in North Korea. There are huge restrictions on being a foreigner in North Korea. There are huge restrictions on just being an ordinary citizen in North Korea. The level of control is that tight. For a journalist, we had to be accompanied wherever we go, whenever we leave our hotel in terms of a TV crew by at least two, what we call North Korean minders.

These are North Korean officials who keep an eye on us, will stop us from filming where they don't want us to film, will not stop the car when we ask them if they don't want us to stop the car in a certain place. Not only them, but there are also people watching the minders. So, there's various levels of control here -- Monita.

RAJPAL: All right. Tim, thank you very much. Tim Schwarz there in Hong Kong. Now, Kim Jong Il death's is generating a lot of reaction on social media. I want to give you an idea of what some people are saying. Sweden's foreign minister, Carl Bildt, says "The death of the dictator is always a period of uncertainty for a dictatorship, and North Korea is the hardest dictatorship in our time."

P.J. Crowley there, the former U.S. assistant secretary of state also weighing in saying, "If North Korea were a normal country, the death of Kim Jong Il might open the door to a Pyongyang spring, but it is not a normal country."

And notable "New York Times" columnist, Nick Kristoff, who was, at one stage, banned from life from North Korea says, "Kim Jong Il was one of the world's most peculiar and least known leaders. Now, he's dead and a successor is even less known."

You've been watching our ongoing coverage of the death of the North Korean leader, Kim Jong Il. We'll be right back. Stay there.